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FG urges Binance to disclose user data amidst investigation into naira speculation
Amid ongoing investigations into allegations of currency speculation, the Federal Government has intensified pressure on Binance to disclose information about its top 100 users in Nigeria, including their transaction history from the past six months.
Negotiations between the government and the exchange have reportedly centered around this request.
Binance, a focal point in the investigations related to speculative attacks on the Naira, has faced scrutiny for its role in the currency’s recent volatility against major currencies, particularly the Dollar, amid devaluation concerns.
The Office of the National Security Adviser is also pushing for Binance to address any outstanding tax obligations to the federal government stemming from its operations in Nigeria.
In a bid to mitigate its economic challenges and restore confidence in the national currency, Nigeria has directed attention towards Binance and other cryptocurrency platforms. Security agencies, in collaboration with the Securities and Exchange Commission (SEC) and the Central Bank of Nigeria (CBN), have taken measures such as blocking web access to cryptocurrency exchanges and detaining two Binance executives who had arrived in Abuja for discussions on the regulatory actions.
Following the dispute, Binance has ceased naira trading on its platform. Reports indicate that the detained executives have been held at a guest house near the national security adviser’s office, with their phones and passports confiscated. As of March 5, 2024, a week after their detention, they have not been formally charged in court.
The federal government had secured a permit to detain both Binance executives for 14 days, a period that ended on Tuesday, the Financial Times further stated.
READ ALSO: Binance discontinues trading in Naira
The crackdown on Binance followed ongoing investigations into the country’s foreign exchange market which had reportedly endured years of distortions, manipulations, and speculations, leading to the continuous weakening of the Naira against major currencies particularly the US dollar in recent times.
Speaking at the just concluded meeting of the Monetary Policy Committee (MPC), CBN Governor, Mr. Olayemi Cardoso, justified the central bank’s recent clampdown on cryptocurrency platforms, particularly Binance which he said, allowed its platform for speculative activities against the Naira.
He explained that unidentified users accessed $26 billion on the platform in 2023 with all the attendant implications for monetary policy, especially the tendency to stoke inflation and make the naira further vulnerable.
Cardoso said there were also indications of illicit inflows and suspicious transactions adding that the CBN had the responsibility to protect Nigerians from the disruptive activities of such crypto platforms.
He said the apex bank was collaborating with the different agencies including the EFCC, police, and the Office of the NSA to crack down on the alleged economic saboteurs.
He said, “We are concerned that certain practices go on that indicate illicit flows going through a number of these entities and suspicious flows.
“In the case of Binance, in the last year alone, $26 billion has passed through Binance Nigeria from sources and users who we cannot adequately identify.
“There is a lot that is going on now as a result of collaboration between the different agencies which includes the EFCC and the police, and of course, the Office of the NSA and in due course, as we progress and have more information to share, we will certainly share but suffice to say that we are determined to do everything it takes to ensure that we take charge of our market and do not allow others to manipulate our markets in a way that ends up distortionary.
“We will not accept it. And we will do everything possible to prevent any of these kinds of infractions from taking place.”
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